Breakingviews: Valeant's deceptive carrot

June 2 - Jeffrey Goldfarb and Rob Cyran discuss the new $54 bln bid for Allergan. Going hostile is one stick. More money is the carrot, but the offer is still mostly in Valeant stock.

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So -- twists and turns in the valiant battle for Allergan keep going back and forth and it's hard to tell who's the aggressor but looks like today balance is the real aggressor. They started out with a real stealth attack the big punch back. -- and now they've raised their bid again added -- license plate twice in the weekend and looks at the bidding against themselves. What they did is they that he -- will raise the 54 billion if management cooperates if you don't we've got a couple sticks here first off I'm black and at pershing square the hedge fund manager. He's that he owns 10% about and he's there and have a proxy fight tumors to get rid of for most of the border Allergan. And the other thing is science that well we also it may take our offer directly to shareholders that don't cooperate they must feel like they've got a good shot to go if there gonna go. Go hostile if they've edited out of their bit desperate. Because wishes it probably. -- a couple of questions -- because what figures they've -- by a lot of companies they got the R&D and in need they showed tremendous growth problem is that as they get bigger gets harder and harder to dip. You know the kind of running uphill in sand and think about that -- And so they've they've made this bid for -- and reverence kind of wondering well hold on hard to be you know they seem to be any ruled that the desperate to close this deal -- Augusta tilted -- For at least a brief time and allergens they they didn't they put up with huge presentation. Really kind of punching valiantly in the -- compared to Tyco and and what you thought about that pretty -- -- -- -- the other -- if they're convicted felon is kind of they were I think they're playing at that sort of that the massive rollout that -- it'll that they aren't they were accused of fraud I don't think they're there with their makes this thing is that. Tyco is doing all these deals and Tyco segments that it can actually need to split up and three companies this and company was all part. Bell is kind of said similar things they've they've done all these deals and then I'm a couple weeks ago the head of science that well actually we're getting so big that may we may split apart in the future to do more deals and -- just investors that we thought you. If you made you know your whole ideas that you rural companies not not as I splitting apart doesn't make any sense but how are gonna gain some traction in the market with this argument right and they seem to. Cast doubt on the whole strategy. And whether or not you really wanna be an owner and the thing is the deal -- if the deal is still majority in -- stock. And if you're an elegant shareholder you've done reasonably well over the past three years. You know Osgood is nine -- An extremely well. We have to wonder you know they appear when is that gonna continue until you're wondering you know what you're exchanging your kind of solid company for this kind of company which may -- not quite solid. So they're they're real questions about selling paper in the market and you actually -- take so I'm sure we'll see more -- has been at this stage -- you -- you think this dual is now. More likely to get -- -- it seems more likely get done however I'm. I'd be pretty skeptical however shareholder taking -- paper so probably will get done but probably shouldn't get yes what -- merit. We'll leave it there and we'll keep an eye on this situation and others to back in corporate news tomorrow.

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